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Concentrated Marketing

19 January, 2016 - 17:13

Some firms—especially smaller ones with limited resources—engage in concentrated marketing. Concentrated marketing involves targeting a very select group of customers. Concentrated marketing can be a risky strategy because you really do have all of your eggs in one basket. The auto parts industry is an example. Traditionally, many North American auto parts makers have supplied parts exclusively to auto manufacturers. But when General Motors, Ford, Chrysler, and other auto companies experienced a slump in sales following the recession that began in 2008, the auto parts makers found themselves in trouble. Many of them began trying to make and sell parts for wind turbines, aerospace tools, solar panels, and construction equipment. 1

Niche marketing involves targeting an even more select group of consumers. When you’re engaging in niche marketing, your goal is to be a big fish in a small pond instead of a small fish in a big pond. 2Some examples of companies operating in niche markets include those shown in Table 5.5 Companies That Operate in Niche Markets

Table 5.5 Companies That Operate in Niche Markets



Market Share (%)





Tropical fish food



Crystal jewels



Snorkeling equipment


St. Jude Medical Center

Artificial heart valves



Microtargeting, or narrowcasting, is a new effort to isolate markets and target them. It was originally used to segment voters during elections, including the 2004 U.S. presidential election. Microtargeting involves gathering all kinds of data available on people—everything from their tax and phone records to the catalogs they receive. One company that compiles information such as this is Acxiom. For a fee, Acxiom can provide you with a list of Hispanic consumers who own two pets, have caller ID, drive a sedan, buy certain personal care products, subscribe to certain television cable channels, read specified magazines, and have income and education levels within a given range. 3Clearly, microtargeting has ethical implications. Data privacy issues will be discussed more in Chapter 14 "Customer Satisfaction, Loyalty, and Empowerment".